EURO CRISIS CONTINUES TO RATTLE PRESIDENCY.

Denmark takes up the EU reins at a critical juncture in the bloc's history, when growth is sagging, governments are retrenching and political alliances are coming undone in the face of a raging sovereign debt and banking crisis that shows no signs of abating. Danish Premier Helle Thorning-Schmidt will be confronted in January with the daunting task of helping to steer negotiations on a new treaty for fiscal discipline, likely to involve only 26 of the EU's 27 member states after Britain opted out.

Denmark's position is complicated by the fact that the new centre-left coalition - made up of economy minister Margrethe Vestager's Social Liberals (Radikale Venstre), Thorning-Schmidt's Social Democrats (Socialdemokratiet) and the Socialist People's Party (Socialistisk Folkeparti), led by foreign minister Villy Sovndal - is a minority government and relies on the support of the leftist red-green alliance to pass any legislation. It is still unclear if the Parliament will support the fiscal compact thrashed out at a December summit, given it involves ceding budgetary sovereignty to the Commission.

Moreover, Denmark is a "euro out", one of the 10 states that sits outside the single currency zone, although its stance on membership is complicated. The country has an "exemption" which can only be overturned by a referendum, but Vestager is firmly in favour of joining, saying that being in the euro would bring "tangible" benefits, economically and politically. "Denmark would gain more influence on the important economic policy developments in Europe," she told Europolitics. "Second, euro participation would provide better protection against increasing interest rate spreads and currency speculation, in particular in the hypothetical case of a deep recession in Denmark."

Despite the complications, Danish officials are realistic about their role in solving the euro crisis, having seen the sluggish pace of change over the last two years. "We'll be doing our best to just put out the fire," said one senior official recently, belying a more relaxed attitude than Poland, which was rebuffed several times when it tried to get involved in eurozone talks. "Maybe it's more difficult to be in the euro," the official said, adding that the government's main consideration is to "keep the EU27 together as much as possible".

That task won't be made easier by the fact that there are several controversial proposals on the table for adoption next year. The first is, of...